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IRS FAQs on health care coverage reporting by large employers

IRS has issued 25 questions and answers (Q&As) to help with information reporting of health care coverage by large employers under Code Sec. 6056. The reporting is voluntary for calendar year 2014 and is first required in early 2016 with respect to calendar year 2015.

Background. Under the Affordable Care Act (ACA), “applicable large employers” or ALEs (generally, employers with at least 50 full-time employees, including full-time equivalent employees) are subject to certain employer shared responsibility provisions (see Code Sec. 4980H). Code Sec. 6056 requires annual information reporting by applicable large employers relating to the health insurance that the employer offers (or does not offer) to its full-time employees. Code Sec. 6056 also requires those employers to furnish related statements to their employees. The information that the employers report allows IRS to administer the Code Sec. 4980H employer shared responsibility provisions and allows their employees to determine whether, for each month of the calendar year they may claim (on their individual tax returns) a Code Sec. 36B premium tax credit.

Code Sec. 6056 was to be effective in 2014, but transition relief was provided in conjunction with the Administration’s delayed implementation of the employer mandate (to 2015 or 2016, depending on the size of the employer). (See Weekly Alert ¶  4  07/18/2013.) Final regs were later issued that provide general and alternative reporting methods to employers subject to the Code Sec. 6056 information reporting requirements. (See Weekly Alert ¶  27  03/13/2014.)

New Q&As. The Q&As generally track the final regs and the preamble, but provide some additional detail on a few issues.

The Q&As cover the following topics: Basics of Employer Reporting (Q&As 1-4); Who is Required to Report (Q&As 5-8); Methods of Reporting (Q&As 9-13); What Information Must ALE Members Report (Q&As 14-16); and How and When to Report the Required Information (Q&As 17-25).

The Q&As amplify the final regs by stating, among other things, that:

…all employers that are ALE members, regardless of whether the employer is a tax-exempt or government entity (including federal, state, local, and Indian tribal governments), are subject to the reporting requirements. (Q&A 6)
…the first Code Sec. 6056 returns required to be filed are for the 2015 calendar year, and they must be filed no later than Mar. 1, 2016 (Feb. 28, 2016, being a Sunday), or Mar. 31, 2016, if filed electronically. (Q&A 17)
…only ALE members filing fewer than 250 employee statements during the calendar year are exempt from electronic filing. Each Code Sec. 6056 return for each full-time employee is counted as a separate return, and only Code Sec. 6056 returns are counted in applying the 250-return threshold for Code Sec. 6056 reporting. (Q&A 19)
…an ALE must report information with respect to all full-time employees, even ones who are not offered coverage during the year. If a member does not offer coverage to any of its full-time employees, the member must file returns with IRS and furnish statements to each of its full-time employees to report information specifying that coverage was not offered. (Q&A 21)
…an administrator of a multiemployer plan may prepare Code Sec. 6056 returns and statements for an ALE member that is a participating employer under the multiemployer plan. Thus, the administrator may prepare returns pertaining to the ALE member’s full-time employees who are covered by the collective bargaining agreement and who are eligible to participate in the multiemployer plan. (Q&A 24)

References: For return requirements for “applicable large employers,” see FTC 2d/FIN ¶  S-3331  ; United States Tax Reporter ¶  60,564.01  ; TaxDesk ¶  816,301  ; TG ¶  60246  .

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